ACA policy experts look Kind(ly) on congressman’s lonely vote to keep ‘Cadillac Health Tax’

Since its inception, one provision of the Affordable Care Act (ACA) has been especially unpopular across the board, including with unions who otherwise backed former President Barack Obama’s landmark law to expand health care coverage.

To help pay for the ACA, the law included a 40 percent excise tax on the value of employer-sponsored health plans exceeding high thresholds — quickly dubbed the “Cadillac Tax” for its focus on the most generous employer health plans.

Opponents, including unions that have successfully bargained to keep high-dollar plans, tried to cut the tax from the original bill and have since successfully lobbied to delay it, most recently until 2022. On Thursday, the opponents notched a victory as the House of Representatives voted 419-6 to repeal “Cadillac Tax” permanently.

Democratic Rep. Ron Kind was one of the handful of “no” votes and the only member of either party in the eight-member Wisconsin congressional delegation to oppose the repeal. 

Kind “believes that Congress needs to be more fiscally responsible and voted against repealing the so-called ‘Cadillac tax’ because there is no pay-for in place,” a Kind spokesperson told the Wisconsin Examiner. “He doesn’t want to saddle future generations with massive debt because Congress keeps passing bills that aren’t paid for.”

Kind, has an 89 percent favorable voting record with the national AFL-CIO, the nation’s largest labor group, but on this vote he tacked away from labor’s position. In a blast email hours before the vote, the labor federation urged members to call their legislators and support repeal, arguing that the tax would unfairly penalize working people with “high quality healthcare plans” while giving employers an incentive “to switch to worse healthcare plans.”

But with his vote, the La Crosse Democrat did side with health policy experts and ACA supporters who consider the Cadillac Health Tax an important anchor for the health insurance law. 

Just a week before the vote, the Center on Budget and Policy Priorities — a Washington, D.C., research institute focusing on reducing poverty and inequality — published a brief urging Congress against repeal.

Ending the tax “would primarily benefit higher-income taxpayers,” wrote the brief’s author, Paul N. Van de Water. “If the tax were repealed and the cost not offset, the resulting higher deficits would be likely, over time, to impede needed investments and increase pressures to cut programs on which many low- and moderate-income families rely.”

In his brief, Van de Water offered alternatives to offset the revenue lost if the tax is repealed. In a phone interview Friday, however, he said he knows of no legislation taking up his suggestions. If the repeal makes it to the White House and is signed into law, he added, “certainly it will not be low-income people getting much benefit.”